Outlook bleak as WPP and Cordiant results revealed

The outlook for recovery in the PR market looks bleak this week following sobering results from WPP and Cordiant Communications.

Hopes of an improvement in industry prospects faded as the results came in, revealing that Cordiant - parent of City PR firm Financial Dynamics - fell into the red after an exceptional charge of £224.8m. Much of this was associated with redundancies.

WPP's PR and PA offerings were hardest hit with revenues falling over 13 per cent, alongside a two per cent dip for healthcare, branding and identity communications, according to CEO Sir Martin Sorrell. Its ad business, expected by analysts to suffer, remained flat.

The group, which owns Hill & Knowlton and Burson-Marsteller, saw revenue fall two per cent to £945.8m, and group revenues dived nearly nine per cent on a like-for-like basis.

Cordiant has scrapped dividends amid a warning that signs of revenue growth may not be seen until next year.

'While previous rates of revenue decline have abated, and we are seeing early signs of business activity emerge, we forecast no revenue growth this year,' said CEO Michael Bungey.

One ray of hope came in the annual results from the listed Huntsworth Group since the takeover last year by Shandwick founder Lord Chadlington.

The company moved into the black with a modest operating profit of £383,000.

The company, initially just the Counsel PR brand, has been on an acquisition spree in the past 12 months and now owns healthcare consultancy Woodside Communications, Stephanie Churchill PR and Harrison Cowley.

Although no dividend is due this year - and none has been paid for more than ten years - Chadlington said a review of the no dividend policy was part of his and chairman Jon Foulds' plans to grow the business. Bank debt has been eliminated and 'acquisitions are trading well,' he insisted.

Further acquisitions are expected in the coming months, with Chadlington in talks with financial PR and public affairs firms.

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